One of Europe’s largest insurers, Italian firm Assicurazioni Generali, is in big trouble over comments attributed to its chief executive alleging a “non-aggression” pact exists with rival mega-insurers.

The European Commission has asked Generali CEO Gianfranco Gutty to explain claims he made in a Financial Times interview that his company has formed a pact with Germany’s Allianz and France’s Axa. The newspaper said the pact is designed to avoid raids on each other’s territory, maintain a balance in various markets and to “respect partnerships”.

Generali’s spin-doctors have been hard at work since the newspaper report, denying that any pact exists. Such an arrangement is illegal under the European Union’s anti-trust laws, as it would be in Australia.